Owner of Carmel’s Clay Terrace acknowledges possible bankruptcy filing

Washington Prime Group, which owns Clay Terrace shopping center in Carmel and several other local retail properties, officially disclosed this week that it has “substantial doubt” about its ability to cover its debts and is contemplating a bankruptcy filing.

The disclosure confirms reports from earlier this month that the company was considering filing for Chapter 11 bankruptcy reorganization.

Washington Prime, a spinoff of Indianapolis-based Simon Property Group, is based in Columbus, Ohio, and also has an office in Indianapolis. It owns about 100 retail centers throughout the United States, including Keystone Shoppes at 3435 E. 86th St., Greenwood Plus at 1251 U.S. Highway 31 North, Washington Plaza at 10030 E. Washington St., and Village Park Plaza in Carmel.

In its fourth-quarter and year-end financial report, filed on Tuesday, Washington Prime posted a loss attributable to shareholders of $111.4 million, or $5.24 per share, compared with a profit of $17.1 million, or 81 cents per share, during the same period a year earlier.

For the full year, the company posted a $233.8 million loss, or $11.04 per share, compared with a loss of $9.8 million, or 47 cents per share, in 2019.

Washington Prime skipped a $23.2 million interest payment that was due on Feb. 15, putting it in danger of going into default after a 30-day grace period. On Tuesday—one day before it would have gone into default—Washington Prime said it had secured a forbearance agreement that ends on March 31.

“The Company is continuing to engage in negotiations and discussions to restructure its capital structure,” Washington Prime said in Tuesday’s financial report. “The uncertainty associated with the company’s ability to meet these obligations as they become due raises substantial doubt about the company’s ability to continue as a going concern as defined by generally accepted accounting principles.”

The company also noted, “the restructuring may need to be implemented in cases commenced under Chapter 11 of the U.S. Bankruptcy Code.”

Bloomberg reported earlier this month that Washington Prime was preparing to file for bankruptcy. Washington Prime did not respond to Bloomberg’s request for comment on that report.

The company, like many other retail landlords, has struggled during the pandemic. Last year, the company earned $506.7 million from tenant rent, down from $633.6 million the previous year.

Shares of Washington Prime, which have traded between $1.69 and $17.55 per share over the past year, closed Wednesday at $2.74 each, rising to $2.79 in after-hours trading.

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